Pension Corporation, the specialist insurer for defined benefit retirement
schemes, is eyeing a £1.2bn float to raise fresh capital to support its
rapid growth.

The company, which in July concluded the UK’s biggest ever pension buyout deal with the assumption of £1.5bn of liabilities from music group EMI, discussed a stockmarket listing last week with investors at a meeting in Guernsey in the Channel Islands.

Its biggest shareholder is Reinet, a Luxembourg-incorporated fund created from the restructuring of Swiss luxury goods group Richemont, which last year invested £400m for a 43pc stake. Other investors include JC Flowers, Coller Capital, Swiss Re, Lloyds Banking Group and Royal Bank of Scotland.

A key issue on the meeting’s agenda was the capital needs of a group that is chaired by insurance industry heavyweight Sir Mark Weinberg and last year more than doubled new premiums to £1.5bn. It is on course to double them again in 2013 to around £3bn.

John Coomber, the former Swiss Re boss who is chief executive of Pension Corp, admitted that a float was now being discussed with investors.

“We don’t yet have a plan but we need to develop one,” he said. “In due course, there will probably be an IPO. It is something that the shareholders and management are discussing.” The group is yet to hire bankers for any float.

Pension Corp operates in the growing market for insuring defined benefit pension schemes – a vast arena, with companies having around £1.5 trillion of such liabilities and the funded portion of public sector liabilities running to about £500bn. Competitors include Legal & General and Rothesay Life.

Thanks to increasing longevity and the difficulty of forecasting liabilities in markets skewed by such things as quantitative easing, companies and organisation have been increasingly seeking peace of mind by insuring against the future costs of retirement schemes.

Pension Corp was founded by former Duke Street Capital boss Edmund Truell and his brother Danny Truell in 2006 to insure such defined benefit schemes, with the company able to buy them out entirely or take on the responsibility for the liabilities via a process known as a buy-in.

The pair, who have since moved on to another acquisition vehicle Tungsten, continue to have a stake of 2pc-3pc via their family trust.

Alongside Sir Mark, co-founder of St James Place Wealth Management, Pension Corp’s non-executives include Bill Winters, the former co-head of JP Morgan Investment Bank, and Harriet Maunsell, former deputy director of the Occupational Pensions Board.

Pension Corp’s latest figures show that at the end of last year, during which it completed transactions for the likes of Aon Hewitt, Cookson and Gartmore, the group had £6.3bn assets under management, almost 65,000 pension fund members and embedded value of £890m.

By the end of this year, assets under management are expected to top £8bn, with the business expected to be worth around a fifth more, including modest debts, than when Reinet took its stake.

The stockmarket has seen a number of insurance floats lately, with Direct Line’s listing being followed by Partnership Assurance, the insurer for the critically ill. Last week, Partnership rival Just Retirement hired advisers to work on a listing.